CCI amends Lesser Penalty Regulations

The Competition Commission of India (‘CCI) vide notification dated 22 August, 2017 (‘Amendment’) has amended the Competition Commission of India (Lesser Penalty) Regulations, 2009 (“Leniency Regulations”). The amendments are the first in more than eight years since the introduction of the leniency regime in India.

The amendments which incidentally come after a few months since the CCI first granted leniency in a cartel case, are largely in line with the draft amendments issued in March 2017 wherein the Competition Commission of India (CCI) invited comments from various stakeholders.

This update captures the key takeaways made to the leniency regime in India

Following are the key amendments made to the existing Leniency Regulations by the amendments

Applicants to include individuals

As per the existing Regulations[1], enterprises alone were permitted to apply to the CCI for leniency. However, the Amendment has expanded the scope of ‘applicant’ to also include individuals and now even individuals involved in an alleged cartel can apply to the CCI for leniency. Consequently, the Amendment also clarifies that the benefit of the Leniency Regulations can be extended to individuals.

The Amendment is a welcome move to encourage individuals to come forward to the CCI with information regarding a cartel arrangement.

Multiple applications now permissible

The existing Leniency Regulations only extended the benefit of the Leniency Regulations to a maximum of three leniency applicants on a first come first serve basis. The Amendment has done away with this limitation and has now permitted additional applicants to avail the benefit of the Leniency Regulations.

This significant amendment will encourage more and more enterprises/individuals to disclose evidence on their respective collusive conduct and ultimately will equip CCI to come to the faster and accurate conclusions.

Confidentiality and Inspection of Documents

The Leniency Regulations as it stood placed an obligation on the CCI to treat as confidential the identity of the applicant or the information obtained from such applicant unless the applicant agrees to a waiver, the disclosure is required by law or in case of a public disclosure by the applicant.[2]

The Amendment while also expanding the scope of the confidentiality clause to now include the office of the Director General, CCI (DG), also provides that even when the applicant has not agreed to a waive, if the DG, deems it necessary to disclose the information, documents etc provided by the applicant, it may do so after taking prior approval of the CCI and after recording the reasons for doing so in writing.

Additionally, the amendments now also provide inspection of non-confidential version of the case file. However, inspection can only be given once the investigation is complete and the report has been circulated to all parties.

Clarification on contents of the application

The amendment clarifies that the applicant now has to expressly provide the details of the volume of business affected in India by the alleged cartel.

Comment: The amendment in the Leniency Regulations were in fact overdue considering the growing number of cartel cases being investigated by CCI. After its first decision in the case of Brushless DC Fans, CCI has now made leniency more attractive, by making individuals eligible to get benefit from the leniency provisions. This will encourage employees within organisations to come forward to blow the whistle and may eventually make the leniency scheme a success, which has been a nonstarter since last eight years of enforcement of the Act.This is indeed a welcome step.

 Comdt. (Retd.) M. M. Sharma heads the Competition Law & Policy team in VA since 2009 and has over 30 years’ experience as an Advocate of Delhi High Court and holds a Post Graduate Diploma in Economics of Competition Law from Kings College, London. He has worked in the Competition Commission of India (CCI) as Additional Registrar during 2006-2008 and was responsible for drafting the Implementing Regulations under the Competition Act, 2002. He has experience of working as Head-Legal /In-house Counsel for a large Corporate Group in the Steel and Power sector before joining VA in 2009. He has represented clients as an independent arguing Counsel in landmark cases decided by CCI, the Competition Appellate Tribunal (COMPAT) , High Courts and the Supreme Court. As a prolific writer, he contributes articles and is regularly quoted on competition issues in National Newspapers and interviewed by TV Channels. He also teaches as a visiting faculty in various Universities and Institutions and is widely regarded as a subject expert in various Committees of Apex Business Chambers, such as FICCI, CII, ASSOCHAM and PHD CCI.
 Mr. Sharma has been mentioned as a “Notable Practitioner” in the “Competition/Antitrust” category of Chambers & Partners (Asia Pacific) Ranking of Leading Lawyers for Business in India for the year 2012 and 2013. VA’s competition law and policy team has also been awarded the Law Firm of the Year Award for “Competition/Antitrust Law” for 2013 by the Indian Business Law Journal.